Payroll Fundamentals 1 PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION

Payroll Fundamentals 1 PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION 1) Hourly rates are a common method in what field of work? (ch.2) - ANSWER -Manufacturing -Production -Unionized environments 2) Daily and hourly earnings equations (ch.2) - ANSWER Hourly rate X Pay period regular hours worked Daily rate X Pay period days worked 3) Define piecework and give it's equation (ch.2) - ANSWER -Rate of pay earned per unit of production Rate X Number of pieces 4) What are the main types of self-insured plans coverage? (ch.2) - ANSWER -Sick pay -Short-term disability -Long-term disability 5) Define sick pay (ch.2) - ANSWER An amount paid to an employee who is absent from work due to illness or injury 6) What is the difference between formal and informal plans for sick pay? (ch.2) - ANSWER -Formal plans outline the amount of sick leave available, amount of sick pay, and if it carries over in the next year -Informal plans are based on the manager's discretion 7) What are the two types of Wage-Loss Replacement Plans (ch.2) - ANSWER -Short-term disability -Long-term disability 8) Define shift premium (ch.2) - ANSWER Additional amounts paid over and above an employee's normal salary or hourly rate for working on an evening or midnight shift 9) Shift premium equation (ch.2) - ANSWER (hourly rate X shift premium %) X hours worked on shift Fixed dollar amount X hours worked on shift Fixed dollar amount X Number of shifts 10) Overtime pay equation (ch.2) - ANSWER [(hourly rate X 1.5) X (hours worked- legislated overtime threshold)] 11) What is the order of calculating statutory deduction (ch.2) - ANSWER -C/QPP -EI -QPIP (Quebec only) -Federal and provincial taxes -Northwest territories/Nunavut payroll taxes 12) What are the CPP and QPP rates? (ch.2) - ANSWER -CPP 4.95% -QPP 5.40% 13) Manual CPP equation (ch.2) - ANSWER (Salary - Pay period exemption) X CPP rate Or look it up in the little book 14) C/QPP is calculated on what? (ch.2) - ANSWER Gross pensionable/taxable income -earnings -taxable allowances -cash taxable benefits -non-cash taxable benefits 15) EI is calculated on what? (ch.2) - ANSWER Gross insurable income -earnings -taxable allowances -cash taxable benefits 16) Federal and provincial taxes are calculated on what? (ch.2) - ANSWER Net taxable income -earnings -taxable allowances -taxable benefits -LESS any deductions allowed 17) Gross earnings equation (ch.2) - ANSWER Earnings + Taxable allowances + Non-taxable allowances + Cash taxable benefits 18) Gross pensionable/taxable income equation (ch.2) - ANSWER Earnings + Taxable allowances + Cash taxable benefit + Non-cash taxable benefit 19) Gross insurable income equation (ch.2) - ANSWER Earnings + Taxable allowance + Cash taxable benefit 20) Taxable renumeration equation (NT/NU) (ch.2) - ANSWER Earnings + Taxable allowances + Cash taxable benefits + Non-cash taxable benefit 21) Taxable cash allowances are... (ch.3) - ANSWER -Are added to employee's earnings and are a part of their take home pay -INCLUDED in Gross Earnings (GE), Gross Pensionable and Taxable Income (GPTI), and Gross Insurable Earnings (GEI) -SUBJECT to C/QPP, EI, QPIP, Federal and Provincial Tax and NT/NU Tax 22) Taxable expense reimbursements are... (ch.3) - ANSWER -INCLUDED in Gross Earnings (GE), Gross Pensionable and Taxable Income (GPTI), and Gross Insurable Earnings (GEI) 23) -SUBJECT to C/QPP, EI, QPIP, Federal and Provincial Tax and NT/NU Tax • Taxable benefits are... (ch.3) - ANSWER -Determined if taxable to the employee by the CRA or RQ -IF employer pays cost of benefit to a third party the value is included in the employee's income as NON-CASH TAXABLE BENEFIT -IF the employer reimburses employees for money they paid for the benefit the reimbursement is included in the employees income as a CASH TAXABLE BENEFIT - Added to employee's earnings and are a part of their take home pay 24) Non-cash taxable benefits are.. (ch.3) - ANSWER -SUBJECT to all statutory withholdings except for EI and QPIP 25) -Is only a value added to the employee's pay for the purpose of calculating statutory deductions 26) Define car allowance (ch.3) - ANSWER -An amount paid or reimbursed to an employee who uses their personal automobile for business -Taxability is based on whether the allowance is considered reasonable or unreasonable by the federal and Quebec government 27) Car allowances can be provided as a... (ch.3) - ANSWER -Flat amount -Fixed amount per business km -Credit card or reimbursement for gas purchases 28) Which province does not impose levies or health care taxes on employers providing group insurance coverage? - ANSWER Saskatchewan 29) Québec considers legislated wages in lieu of notice as: - ANSWER a retiring allowance 30) In Québec, which of the following types of earnings is not considered to be vacationable? - ANSWER Discretionary bonus 31) A Requirement to Pay notice remains in force until: - ANSWER The employee's liability is paid in full or until the CRA releases the employer from its collection obligation 32) An amount paid to an employee in recognition of long service or as compensation for loss of their office or employment, is considered what type of payment? - ANSWER Retiring allowance 33) In what circumstances would Service Canada typically request the employer to issue a Record of Employment for an active employee? - ANSWER when an employee is working two jobs and experiences an interruption in one of them 34) Etienne was employed from July 15, 1988 through January 10, 2007. He was fully vested in the organization's pension plan at the time he received the retiring allowance. Calculate the number of years eligible for the $2,000.00 portion of a retiring allowance. - ANSWER 8 35) When entering the employee's name on the Record of Employment, which format should be used? - ANSWER first name and initials followed by last name 36) Worker that has Fed, OASDI, Medicare, State withheld - ANSWER Employee 37) Worker that requires the employer to pay ER taxes - ANSWER Employee 38) Worker that receives W2 form - ANSWER Employee 39) Worker that does not have taxes withheld - ANSWER Independent Contractor 40) Worker that has TIN - ANSWER Independent Contractor 41) Worker that receives 1099 Form - ANSWER Independent Contractor 42) Asks how independent is the employee and how much control can be exercised over the worker. - ANSWER Common Law Test